Many times, an interpleader action is pursued by a life insurance company after two or more individuals file a competing life insurance claims for the same death benefit that is only required to be paid once under a life insurance policy. A life insurance company usually pursues an interpleader action in court by initiating a lawsuit as a plaintiff, whereby it sues all individuals who may have a claim to the life insurance benefit at issue as defendants to the lawsuit, and lets the claimants litigate who is entitled to the money at issue. The court then decides which claimant prevails, which has the effect of the insurance company avoiding a risk of double liability to more than one claimant.
Eleventh Circuit Court of Appeals Finds that Reliance Standard Life Insurance Company Acted Unreasonably When it Denied Disability Insurance Benefits Under the Pre-Existing Condition Exclusion to a Woman Who Suffered a Stroke Nine Days After Giving Birth
Julissa Bradshaw had a healthy pregnancy and no other pre-existing medical conditions when she became insured under her ERISA governed disability insurance policy with Reliance Standard Life Insurance Company ("RSL"). Approximately six months after obtaining the policy, Julissa gave birth to her daughter. Tragically, nine days later, Julissa suffered a debilitating stroke and was unable to return to work. Accordingly, Julissa filed a claim for long-term disability benefits with RSL. RSL denied Julissa's claim, alleging that her healthy pregnancy qualified as a pre-existing condition that "contributed to" her stroke. RSL argued that the Policy permits RSL to deny long-term disability benefits for a total disability that was "caused by," "contributed to by," or "resulting from" a pre-existing condition unless the insured has been actively at work for a full year. RSL claimed that because Julissa had not been employed for a full year, was pregnant during the "look-back period," and her pregnancy "played a part in producing" the stroke, her pregnancy "contributed to" her stroke and was therefore excluded from coverage.
